How are businesses taxed?
• Are all business entities taxed the same ? • What is the best way to minimize taxes on my business? • What happens if a business doesn’t pay its taxes ? • What does the term ” pre-tax ” dollars mean? • So what are ” after-tax ” dollars? • Should I hire an accountant or a tax preparer to do my business tax returns? • What is a ” tax basis ,” and why do I care? • What is a ” capital ” account? • How do sales or use taxes affect my business? • What is the difference between depreciating and expensing an item? • What are capital gains taxes and how do they affect my business? • What are excise taxes and how do they affect my business? • Why do some businesses have different tax years ? • What kind of payroll taxes am I liable for as an employer? • Can I avoid payroll taxes by hiring independent contractors rather than employees? • What are the tax consequences of buying or selling a business? Q: How are businesses taxed? A: When people think of taxes paid by businesses, income taxes are
When people think of taxes paid by businesses, income taxes are probably what come to mind first. But income taxes are only one of many different kinds of taxes assessed against businesses by federal, state and local governments. Oftentimes, a tax on a business is called something else like “license fee” or an “assessment,” but any payment to the government is essentially a tax. In the United States, all businesses are subject to federal taxation on their income. But they”re also subject to taxation by state and local governments, each one of which has different rules and regulations: • At the local level, most businesses are required to obtain a business license, which is a form of tax. There are also registration fees, fees for permits and local excise taxes. In addition, local governments assess businesses for taxes on both real and personal property, plus special levies and assessments such as for redevelopment projects or infrastructure improvements. Sales or use taxes may be asse
